Margaret Thatcher handing over the keys and deeds to home in Amersham Road, Essex, after it was purchased under right-to-buy. Photograph: PA Archive

The death of Margaret Thatcher – the UK's first female prime minister and in the 20th century, the longest serving – is an opportunity to explore her housing legacy and what role it plays in today's growing housing crisis.

What is striking about her premiership is how the two aspects of Thatcherism – economic neo-liberalism and social conservatism – were conflated in her government's housing policy. And it was in this sector that the tensions in these two planks of governing philosophy were exposed.

Thatcher's period in office was bracketed by two major housing acts – in 1980 and 1988 – that fundamentally changed the UK housing system. These changes have had long-reaching effects, reverberating around today's housing environment and which sowed the seeds of the 2008 financial crash.

Extending home ownership and transferring social housing from local authorities to other landlords, most notably housing associations, were chief housing policy aims and extending the market in housing while reducing the influence of local authorities also took root in Thatcher's economic neo-liberalism.

However, Thatcher's championing of subsidies to promote home ownership was a product of her social conservatism and created tension with successive chancellors who contended that such subsidies distorted the housing market. Her government systematically transferred subsidies from economically productive housebuilding to support mortgages and rents. We live with this legacy today where for every £1 of public subsidy spent on housebuilding, £5 is allocated to support housing costs, compared to a ratio of £1:1 in 1979.

For Thatcher, the grocer's daughter from Grantham, home ownership was key to a cohesive and moral family life. Reliance upon social housing was viewed as sapping personal responsibility and initiative. This social conservatism echoes in today's association between social tenancies and welfare dependency and fecklessness, particularly by Thatcher's Conservative successors.

The 1980 Housing Act extended right-to-buy council homes to tenants with generous discounts. In the following decade more than a million council homes were sold at an estimated cost in today's money of more than £60bn. The majority of sold-off homes were not replaced, leaving social housing as a residualised tenure. Since her fall in 1990, a further 500,000 were bought under less generous discounts – until the recent reinvigoration of the scheme in 2011 and 2013.

Alongside this sell-off of state assets, Thatcher used mortgage interest tax relief at source to subsidise home ownership. Between 1979 and 1990, this subsidy rose from £2.5bn to more than £8bn with the number of recipients rising by 66% to 9.7 million at the end of the 1990s. This stoked house prices, which doubled over the decade, and laid the foundations for unsustainable levels of home ownership which contributed to the financial crash in 2008.

Almost half of the subsidy went to the already well-paid households with the largest mortgages, therefore subsidising the increasing inequality between high-income and low-income home owners. It also played a part in exacerbating inequality between home ownership and social housing. At the same time, housing completions fell by 25% to 155,000 a year in 1990. Social housing completions collapsed by 75% over the same period and were just 23,000 in 1990.

The Housing Act 1988 expanded private sector financial input into social housing development, and introduced assured tenancies and a higher rent regime. This left the housing benefit bill to take the strain, which swelled to five times its original size to almost £25bn a year today.